Value Added Tax and Freeport ....

So the magic city is watching as the country attempts to implement the Value Added Tax to its books.

Good or bad, depends on the person you are talking to.

But for Freeport, as was said before, we may escape the VAT altogether.

Why? The Hawksbill Creek Agreement that began this magical city.

Here is what it says to VAT: (Thanks Wayne Russell)

14.  VAT and the Hawksbill Creek Agreement (HCA)

Under  Clause 2 of  the  HCA,  the  Port  Authority  and its licensees  are exempt from customs duties and taxes on imported goods that are used for developmental  or manufacturing  purposes within the  Port Area, or which support the administrative purposes of the Port Authority. Goods of a consumable nature are excluded from this treatment.

In the VAT draft Bill, it is stated that the VAT law  would apply in the Hawksbill Creek Port  Area where:

  a taxable supply within the Hawksbill Creek Port  Area is made by:

(i)  a  taxable  person  who  is  a  Port  licensee  to  a person  who  is  not  a Port licensee;

(ii)  a  taxable  person  to  a  person  who  is  a  Port  licensee,  where  the supply  is  not  of  a  kind  or  usage  within  the  meaning  of  section  2of the HCA (which sets out the terms and conditions governing the duty and other tax exemptions enjoyed by the Port Authority and Port licensees);

(iii)  a  taxable person  to  another  person  neither  of  whom  is  a  Port licensee

  a  taxable  importation  from  outside  The  Bahamas  is  made  into  the Hawksbill Creek Port Area by a person who:

(i)  is not a Port licensee;

(ii)  is  a  Port  licensee  but  the  goods  or  services  are  not  of  a  kind  or usage within the meaning of section 2 of the HCA;

  a  taxable  importation  of  goods  from  outside  The  Bahamas  is  made into  the  Hawksbill  Creek  Port  Area  for  the  personal  use  of  any person;

  a  taxable  supply  of  goods  in  the  Hawksbill  Creek  Port  Area  is made  by  a  taxable person for the personal  use of any person;

  a    taxable    person    within    the    Port    Area,    whether    or    not    a    Port licensee,  makes  a  taxable supply  within The  Bahamas  to  a  recipient outside the Hawksbill Creek Port Area;

  a  taxable  person  in  another  part  of  The  Bahamas  makes  a  taxable supply  to a recipient  in the Hawksbill Creek Port Area who —

(i)  is not a Port licensee;

(ii)  is  a  Port  licensee  but  the  supply  is  not  of  a  kind  or  usage within the meaning of section 2 of the HCA.

The  VAT  law  would  not  apply  in  relation  to  the  Hawksbill Creek Port Area where:

  a  taxable  supply  within  the  Hawksbill  Creek Port Area  is  made  by  a taxable  person  who  is  a  Port  licensee  to  another  Port  licensee  and the  goods  or  services    are    of    a    kind    and    usage    referred    to    in clause   2   of  the HCA;

  a  taxable  importation  from  outside  The  Bahamas  is  made  into  the Hawksbill  Creek  Port  Area  by  a  Port  licensee  and  the  goods  or services are  of a kind and usage referred to in clause  2 of the HCA.

And all this comes into affect 1st January 2015.

But no word yet on what will happen with the other concessions of the Hawkbill Creek Agreement that is due to come to a close August 2015.